C-store operator Alimentation Couche-Tard Inc. this week reported a 53% decrease in quarterly profits as it saw net earnings in the fourth quarter drop to $15.5 million – a decrease of $17.9 million from last year.
The retailer said the drop comes amid weak motor fuel gross margins in the U.S., but it also said other causes included higher expenses related to electronic payment modes and the economic slack of its business units in the southern U.S.
The Canadian Press reported that, despite the company’s financial hit and the dreary U.S. economy, Couche-Tard still plans to add 300 more stores this year.
The company did see its revenues for the fourth quarter grow by 24.7% to $3.7 billion (a $733.2 million jump), largely because of recent acquisitions and the sharp increase in the price of gas at the pump.
“The past quarter was extremely challenging in the United States,” said Couche-Tard President and CEO Alain Bouchard. “We faced turbulence on several fronts, namely an economic slack in our southern divisions combined with motor fuel margins far below historical averages, compounded by electronic payment modes expenses exceeding the four cents per gallon average this quarter.
“Given these circumstances, our operational teams focused on in-store execution and on maintaining our market share,” Bouchard said. “We expect to be fully prepared when better market conditions arise. I would also add that we have an excellent balance sheet and a solid cash position which we fully intend to leverage when growth opportunities will arise.”
Couche-Tard said it will continue its rapid expansion, with plans to refurbish about 350 stores and acquire between 200 and 300 stores, The Canadian Press reported.
Additionally, Couche-Tard said it obtained a $310 million revolving unsecured credit facility to give it additional flexibility to fund acquisitions and repurchase shares.
Couche-Tard operates more than 5,100 convenience stores in Canada and the U.S., including the Circle K brand.